Vierich et al v. MGM Grand Hotel, LLC et al
Filing
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ORDER Granting 33 Motion to Dismiss. This action is DISMISSED. FURTHER ORDERED that this actions will be dismissed WITH PREJUDICE unless Plaintiffs file within 7 days following entry of this order, a motion for leave to amend which complies in every respect with the Federal Rules of Civil Procedure and Local Rules. Signed by Judge Kent J. Dawson on 11/1/12. (Copies have been distributed pursuant to the NEF - MMM)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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WOLFGANG VIERICH, et al.,
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Plaintiffs,
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v.
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Case No. 2:11-CV-01623-KJD-CWH
MGM GRAND HOTEL, LLC, et al.,
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ORDER
Defendants.
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Before the Court is the Motion to Dismiss (#33) filed by Defendants MGM Grand Hotel,
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LLC and Mandalay Corp. Plaintiffs Vitala & Keller Associates Limited, Vitala Group, Vitala Group
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Investments Limited, Vitala International Consultants Limited, Vitala Limited, and Vitala
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Management Services Limited have filed a response (#34) and Defendants have filed a reply (#35).
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I. Background
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In March of 2008, Wolfgang Vierich negotiated and executed several Negotiable Instruments
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in favor of Defendants in Las Vegas, Nevada. The total amount of the Negotiable Instruments was
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$245,000. Defendants did not receive payments on the Instruments from Vierich and sued him in
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Nevada state court (“Vierich I”) for non-payment, plus interests, costs, and fees. Vierich did not
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assert any counterclaims in Vierich I.
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Defendants moved for summary judgment in Vierich I. Vierich did not dispute his liability
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on the Instruments. Instead, Vierich asserted that he had directed his brokerage banks to issue
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payment, but provided no evidence to support this contention. The state court gave Vierich
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additional time to present evidence, but Vierich failed to provide any documentation or testimony
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regarding payment. Based on Vierich’s failure to present any evidence of payment, the state court
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entered summary judgment in Defendants’ favor.
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Vierich appealed the state court’s judgment in Vierich I to the Nevada Supreme Court which
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denied the appeal without argument. Vierich then filed a Petition for Writ of Certiorari to the United
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States Supreme Court which was denied.
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On April 15, 2009, the State of Nevada initiated a criminal proceeding against Vierich,
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charging him with fraud in violation of N.R.S. § 205.130 and § 205.132, based on bad check/marker
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complaints filed by Defendants. Vierich failed to appear and a warrant has been issued for his arrest.
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Vierich and Plaintiff Vitala, a corporate entity controlled by Vierich, jointly filed a separate
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state court suit (“Vierich II”) alleging causes of action related to the issuance and nonpayment of the
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Instruments, including malicious prosecution, fraud, tortious interference with business relations,
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intentional infliction of emotional distress, slander, defamation, and libel. Vierich II was dismissed,
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without prejudice, on February 17, 2011.
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On October 6, 2011, Vierich and Plaintiff Vitala filed this action in federal court. They later
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amended the Complaint to include the other Plaintiffs, which are also sub-entities of Vitala aslo
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controlled by Vierich. According to the Complaint, the criminal proceedings initiated by the Clark
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County District Attorney were a result of the misrepresentations and omissions by Defendants
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regarding checks written by Vierich. The Complaint alleges causes of action for fraud, tortious
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interference with business relations, intentional infliction of emotional distress, breach of contract,
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and negligent hiring, training, and supervision.
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Because Defendants obtained a judgment in Vierich I against Plaintiff, they caused an writ of
execution to be served on Vierich’s personal property described as “choses in action, causes in
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action, things in action, claims and interest” in the instant federal case. Defendants purchased this
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property at a sheriff’s sale and subsequently stipulated to dismissal of Vierich’s personal causes of
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action against Defendants (#32). Accordingly, the only remaining Plaintiffs are the corporate entities
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of which Vierich is principal.
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I. Motion to Dismiss
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A. Legal Standard for Motion to Dismiss
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A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which
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relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide “a short
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and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
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8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require
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detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic
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recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
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(citations omitted). “Factual allegations must be enough to rise above the speculative level.”
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Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient
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factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (citation
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omitted).
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In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when
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considering motions to dismiss. First, a district court must accept as true all well-pled factual
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allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth.
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Id. at 1950. Mere recitals of the elements of a cause of action, supported only by conclusory
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statements, do not suffice. Id. at 1949. Second, a district court must consider whether the factual
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allegations in the complaint allege a plausible claim for relief. Id. at 1950. A claim is facially
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plausible when the plaintiff’s complaint alleges facts that allows the court to draw a reasonable
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inference that the defendant is liable for the alleged misconduct. Id. at 1949. Where the complaint
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does not permit the court to infer more than the mere possibility of misconduct, the complaint has
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“alleged—but not shown—that the pleader is entitled to relief.” Id. (internal quotation marks
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omitted). When the claims in a complaint have not crossed the line from conceivable to plausible,
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the complaint must be dismissed. Twombly, 550 U.S. at 570.
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B. Causes of Action Personal to Vierich
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1. Fraud
The Amended Complaint’s allegations of fraud are that Defendants “falsely informed the
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District Attorney that Vierich intended to defraud Defendants by issuing checks to Defendants
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without sufficient funds available in the accounts, for which Defendants attempted to withdraw the
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money to be paid by Vierich, in violation of NRS 205.130 and 205.132.” As stated earlier, Vierich is
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no longer a party to this action. The remaining Plaintiffs have not set forth any facts showing how
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they, as corporations, are entitled to relief for fraud based on statements allegedly made about
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Vierich.
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2. Intentional Infliction of Emotional Distress
The only remaining Plaintiffs are corporate entities. It is beyond obvious that a corporate
entity cannot suffer emotional distress. Accordingly, this claim is dismissed.
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3. Breach of Contract
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The allegations for breach of contract all relate to interactions between Defendants and
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Vierich. The complaint does not allege any conduct that could give rise to a contract between
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Plaintiffs and Defendants and fails to show how any of the remaining Plaintiffs could be entitled to
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relief for breach of contract. Accordingly, this claim is dismissed.
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4. Negligent Hiring, Training, and Supervision
The remaining Plaintiffs have failed to set forth specific facts showing that any of
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Defendants’ agents interacted with, owed duties to, or were involved in any way with Plaintiffs. The
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allegations of this claim are conclusory and do not state a cause of action. Accordingly, this claim is
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dismissed.
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C. Tortious Interference with Business Relations
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In order to recover for tortious interference with business relations, a plaintiff must show: 1) a
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prospective contractual relationship between the plaintiff and a third party; 2) the defendant’s
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knowledge of this prospective relationship; 3) the intent to harm the plaintiff by preventing the
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relationship; 4) the absence of privilege or justification by the defendant; and, 5) actual harm to the
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plaintiff as a result of the defendant’s conduct. Leavitt v. Leisure Sports Incorporation, 103 Nev. 81,
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88, 734 P.2d 1221, 1225 (Nev. 1987).
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Plaintiffs claim to have lost $279,869,522.00 in revenue as a result of the warrant Defendants
allegedly caused to be issued against Vierich. Plaintiffs have not alleged anything other than
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conclusory and implausible facts showing that Defendants were aware of a prospective relationship
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with any third party. In fact, Plaintiffs do not even allege facts plausibly showing that Defendants
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were aware of Plaintiffs at all. Accordingly, the claim for tortious interference with business
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relations fails as a matter of law.
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D. Leave to Amend
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Federal Rule of Civil Procedure 15(a)(2) provides that courts “should freely give leave [to
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amend] when justice so requires.” Under this standard, there is a general “policy to permit
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amendment with ‘extreme liberality.’” Chodos v. West Publ’g Co., 292 F.3d 992, 1003 (9th Cir.
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2002) (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990)).
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Vierich is no longer a party to this action and the judgment from Vierich I, and other
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evidence from the pleadings in this case, suggest that the corporate Plaintiffs will not be able to
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successfully amend the complaint. However, the Court will not prohibit Plaintiffs from filing aa
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motion for leave to amend which contains a proposed amended complaint as required by Local Rule
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15-1. If such a motion is not filed within 7 days from the date of this Order, then this action will be
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dismissed with prejudice.
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E. Attorney’s Fees
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Defendants have requested attorneys’ fees and costs. The Court denies this request.
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However, given the history of litigation between these parties, the Court warns Plaintiffs’ counsel
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that Rule 11 prohibits filing any pleading for an improper purpose, based on a frivolous argument, or
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without evidentiary support. The Court will not hesitate to impose sanctions on Plaintiffs’ counsel
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and Plaintiffs if they file a baseless motion for leave to amend, or undertake any other practice that
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violates Federal Rules and the Nevada Rules of Professional Conduct. The Court will not entertain
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motions for reconsideration of this Order.
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III. Conclusion
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IT IS HEREBY ORDERED THAT Defendants’ Motion to Dismiss (#33) is GRANTED
and this action is DISMISSED.
IT IS FURTHER ORDERED that this action will be dismissed WITH PREJUDICE
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unless Plaintiffs file within 7 days following entry of this order, a motion for leave to amend which
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complies in every respect with the Federal Rules of Civil Procedure and Local Rules.
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DATED this 1st day of November 2012.
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_____________________________
Kent J. Dawson
United States District Judge
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